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Would you have to be slightly mad to try and start your own business? Well, while the answer is strictly speaking no, new research from the Australian School of Business at UNSW shows that successful entrepreneurs and psychopaths may in fact share some underlying characteristics.
The research, conducted by PhD candidate Benjamin Walker and Professor of Business Psychology Chris Jackson, found that, like psychopaths, those with an entrepreneurial bent persist in taking risks, even if they have suffered – often repeated – setbacks. Punishment, be it social or professional, does not pose as insurmountable an obstacle to these two groups.
Of course, successful entrepreneurs may not encounter such setbacks in the first place, but it is important to be able to be comfortable with high levels of risk one encounters in the first place. “If someone's inhibitions and levels of fear are too high, then they will probably never start a business, because it is risky,” reflects Walker.
Richard Branson is a good example, with no shortage of failed ventures (Virgin Cola is the most famous; there were also ill-fated ventures into the bridal, cosmetic and lingerie sectors) behind him, and a passion for adventure sports which is not uncommon in entrepreneurs, according to Walker.
Sensation Seeking
The research started out, he explains, from Jackson’s investigations into sensation seeking. “This research follows, looking at how the sensation seeking cluster of traits, i.e. impulsivity, lack of inhibitions, boldness, fearlessness, could lead to either dysfunctional or functional outcomes.”
Does it follow from the research that in order to be successful in business, one should try and give in to their inner psychopath, as it were? Not quite, says Walker, “It's more saying that people that biologically have low inhibitions may be more likely to act on their impulses and do things such as start businesses. Of course, acting on impulses and starting a business does not guarantee that business will be successful! But obviously there is more chance of success then someone who doesn't start a business.”
Risk takers are often the beneficiaries when market conditions change for the better after a downturn, with more cautious businesspeople reluctant to reenter the fray. However, this can also obviously backfire.
Business risk takers
Of course, as suggested above, sensation seeking traits on their own aren’t going to make for successful entrepreneurs. The outcomes, in fact, may be negative if some restraint is not exercised. “There are definitely dangers. If someone is too impulsive and takes too many business risks, then the enterprise may fail,” Walker states. “Perhaps partnering with others that are less impulsive could be good, but that is not an issue explored in the current research.”
From this it follows that companies should be careful as to who they promote to a higher level. While business risk takers will certainly be able to capitalize on opportunities other might not, there may be a case for supporting them with those who will temper their enthusiasm and ensure the risks remain measured.
So exactly how open to business risk are most successful entrepreneurs? “It's hard to work out exactly what the ideal level is, and entrepreneurs are very diverse people. If they are too reckless, then presumably there is more likelihood of the business failing. But,” he reiterates, “the fact a business has been created in the first place means there is some chance of success, which obviously people who do not start a business do not have.”
The conclusion here seems to be, that sensation seekers will stand a better chance in business simply by virtue of being willing to take the risks concomitant to launching any enterprise. However this can lead to poor decisions – and, of course, energies being directed to anti rather than pro-social outcomes. So when it comes to taking risks, being a successful entrepreneur hinges on being saying yes…but also knowing occasionally when to say no.
Mansoor is a contributor to and former editor of TopMBA.com. He is a higher and business education specialist, who has been published in media outlets around the world. He studied English literature at BA and MA level and has a background in consumer journalism.
Do Psychopathic Tendencies Help Make for Successful Entrepreneurs?
By Pavel Kantorek
Updated July 30, 2019 Updated July 30, 2019Would you have to be slightly mad to try and start your own business? Well, while the answer is strictly speaking no, new research from the Australian School of Business at UNSW shows that successful entrepreneurs and psychopaths may in fact share some underlying characteristics.
The research, conducted by PhD candidate Benjamin Walker and Professor of Business Psychology Chris Jackson, found that, like psychopaths, those with an entrepreneurial bent persist in taking risks, even if they have suffered – often repeated – setbacks. Punishment, be it social or professional, does not pose as insurmountable an obstacle to these two groups.
Of course, successful entrepreneurs may not encounter such setbacks in the first place, but it is important to be able to be comfortable with high levels of risk one encounters in the first place. “If someone's inhibitions and levels of fear are too high, then they will probably never start a business, because it is risky,” reflects Walker.
Richard Branson is a good example, with no shortage of failed ventures (Virgin Cola is the most famous; there were also ill-fated ventures into the bridal, cosmetic and lingerie sectors) behind him, and a passion for adventure sports which is not uncommon in entrepreneurs, according to Walker.
Sensation Seeking
The research started out, he explains, from Jackson’s investigations into sensation seeking. “This research follows, looking at how the sensation seeking cluster of traits, i.e. impulsivity, lack of inhibitions, boldness, fearlessness, could lead to either dysfunctional or functional outcomes.”
Does it follow from the research that in order to be successful in business, one should try and give in to their inner psychopath, as it were? Not quite, says Walker, “It's more saying that people that biologically have low inhibitions may be more likely to act on their impulses and do things such as start businesses. Of course, acting on impulses and starting a business does not guarantee that business will be successful! But obviously there is more chance of success then someone who doesn't start a business.”
Risk takers are often the beneficiaries when market conditions change for the better after a downturn, with more cautious businesspeople reluctant to reenter the fray. However, this can also obviously backfire.
Business risk takers
Of course, as suggested above, sensation seeking traits on their own aren’t going to make for successful entrepreneurs. The outcomes, in fact, may be negative if some restraint is not exercised. “There are definitely dangers. If someone is too impulsive and takes too many business risks, then the enterprise may fail,” Walker states. “Perhaps partnering with others that are less impulsive could be good, but that is not an issue explored in the current research.”
From this it follows that companies should be careful as to who they promote to a higher level. While business risk takers will certainly be able to capitalize on opportunities other might not, there may be a case for supporting them with those who will temper their enthusiasm and ensure the risks remain measured.
So exactly how open to business risk are most successful entrepreneurs? “It's hard to work out exactly what the ideal level is, and entrepreneurs are very diverse people. If they are too reckless, then presumably there is more likelihood of the business failing. But,” he reiterates, “the fact a business has been created in the first place means there is some chance of success, which obviously people who do not start a business do not have.”
The conclusion here seems to be, that sensation seekers will stand a better chance in business simply by virtue of being willing to take the risks concomitant to launching any enterprise. However this can lead to poor decisions – and, of course, energies being directed to anti rather than pro-social outcomes. So when it comes to taking risks, being a successful entrepreneur hinges on being saying yes…but also knowing occasionally when to say no.
This article was originally published in April 2016 . It was last updated in July 2019
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Mansoor is a contributor to and former editor of TopMBA.com. He is a higher and business education specialist, who has been published in media outlets around the world. He studied English literature at BA and MA level and has a background in consumer journalism.
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